Approvals for the construction of new homes has fallen by a sharp 11 per cent across Australia.

Official figures showed building approvals fell 11 per cent in September, much worse than the one per cent fall economists had been expecting.

But on the plus side, most of the fall came from the high-density dwelling category, which is typically volatile and not as important to the economy as stand-alone houses, JP Morgan economist Tom Kennedy said.

“It’s a lot weaker than we had expected but if you’re looking for the good news, it’s that the bulk of the weakness was in the high-density component,” Mr Kennedy said.

“That category is often volatile and is prone to having large downturns and large spikes.

“We think it’s more or less an aberration and we think we’ll see it bounce back in the next few months.

“It’s not a good number but it’s probably not as alarming as the headline would suggest.”

On a seasonally adjusted basis, the figures still say approvals were granted for just over 15,000 houses and apartments during the month. That's an annual rate of 180,000 for a nation that has built more than 180,000 homes only once in the thirty or more years since records began.

Rather than a 'shock' low, this is another strong result and should be read that way.

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Official figures showed building approvals fell 11 per cent in September, much worse than the one per cent fall economists had been expecting.

But on the plus side, most of the fall came from the high-density dwelling category, which is typically volatile and not as important to the economy as stand-alone houses, JP Morgan economist Tom Kennedy said.

“It’s a lot weaker than we had expected but if you’re looking for the good news, it’s that the bulk of the weakness was in the high-density component,” Mr Kennedy said.

“That category is often volatile and is prone to having large downturns and large spikes.

“We think it’s more or less an aberration and we think we’ll see it bounce back in the next few months.

“It’s not a good number but it’s probably not as alarming as the headline would suggest.”